Europe District Heating Market Size & Share Analysis - Growth Trends & Forecasts (2025 - 2030)

The Report Covers Europe District Heating Market Statistics & Forecast. The Market is Segmented by End User (residential, Commercial, and Industrial), and Country (Germany, France, Poland, Scandinavian Countries, Czech Republic, Austria, and the Rest of Europe). The Market Size and Forecasts are Provided in Terms of USD Value for all the Above Segments.

Europe District Heating Market Size & Share Analysis - Growth Trends & Forecasts (2025 - 2030)

Europe District Heating Market Size

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Europe District Heating Market Summary
Study Period 2019 - 2030
Base Year For Estimation 2024
Forecast Data Period 2025 - 2030
Market Size (2025) USD 62.11 Billion
Market Size (2030) USD 82.73 Billion
CAGR (2025 - 2030) 5.90 %
Market Concentration Medium

Major Players

Europe District Heating Market Major Players

*Disclaimer: Major Players sorted in no particular order

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Europe District Heating Market Analysis

The Europe District Heating Market size is estimated at USD 62.11 billion in 2025, and is expected to reach USD 82.73 billion by 2030, at a CAGR of 5.9% during the forecast period (2025-2030).

Introducing new technologies like machine learning, IoT services, and smart meters has helped optimize the heating cycles according to the varying demands in Europe.

  • A district heating system helps achieve energy efficiency and reduces the cost for both residential and commercial users. The demand for the solutions is expected to be particularly high in Europe. It is expected to see higher investments over the coming years. According to the Heat Roadmap Europe data, if the urbanization trend continues and appropriate investments are implemented, district heating could meet almost half of Europe's heat demand by 2050.
  • Approximately 60 million EU (European Union) citizens are currently served by district heating, with an additional 140 million people living in cities with at least one district heating system. According to EU and the IEA reports, DH currently meets around 11-12 percent of the EU's heat demand via 6,000 district heating and cooling networks.
  • The increasing focus on the shift toward renewable energy sources, instead of fossil fuels, by the governments of multiple countries across the globe is expected to offer great opportunities for innovations in the district heating market. For instance, in February 2022, the European heating market agreed to phase out fossil gas, a joint decision undertaken by NGOs and industry.
  • For instance, Finland plans to increase the renewable energy share in its energy consumption to about 50 percent by 2030. Further, a medium-term climate change plan for 2030 was released. Finland plans to close coal-fired CHP plants slowly by 2030, along with financially supporting operators that switch to efficient biomass CHP and new heating technologies by 2025. It is expected to decrease the district heating CHP capacity due to the decommissioning of plants. The remaining district heating CHP plants can be converted to 100 percent biomass.
  • Additionally, the increasing decarbonization initiatives across the globe, specifically in Europe, led to initiatives and programs that fuel the transition of district heating systems from fossil fuels to renewables. Moreover, Vattenfall AB has plans to decarbonize its production portfolio in the cities. The decarbonization process is expected to be implemented first, with the coal/peat phase-out by 2030, followed by the replacement of fossil gas by 2050.
  • However, the installation of district heating systems often requires significant initial investment costs. This cost factor can act as a restraint on the market growth. The district heating systems may also need help in providing efficient heating solutions for small heating loads or in areas with limited space for distribution grids.
  • Moreover, Russia's invasion of Ukraine has highly impacted energy and food markets across the globe, especially in Europe. Since the second half of 2021, there has been a sharp increase in energy prices in the region. The price of fuels has risen as a consequence of the Russia-Ukraine war, which has also led to concerns related to the security of the energy supply in the region. Russia's decision to suspend gas deliveries to several EU member states has further impacted the situation.

Europe District Heating Industry Overview

The European district heating market is Semiconsloidated, with the presence of major players like Vattenfall AB, Danfoss AS, Engie SA, Statkraft AS, and Logstor AS. Players in the market are adopting strategies such as partnerships and acquisitions to enhance their product offerings and gain sustainable competitive advantage.

In September 2022, The German government announced the EUR 3 billion (USD 3.20 billion) subsidy scheme until 2026 that would sustain the construction of district heating grids that use at least 75 percent renewable energy.

In April 2023, TU Dublin, in collaboration with South Dublin County Council (SDCC) with the assistance of the Dublin energy agency, Codema, announced that it would be part of Ireland's first low-carbon sourced district heating system, with its Tallaght campus part of an innovative, low-carbon initiative. The not-for-profit Heatworks district heating network will initially provide heat to 32,800 sq mts of local public buildings at TU Dublin and SDCC, expanding to heat 133 affordable apartments in 2025.

Europe District Heating Market Leaders

  1. Vattenfall AB

  2. Danfoss A/S

  3. Energie SA

  4. Statkraft AS

  5. LOGSTOR Denmark Holding ApS

  6. *Disclaimer: Major Players sorted in no particular order
Europe District Heating Market Concentration
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Europe District Heating Market News

  • July 2024: The World Bank has introduced a substantial USD 3.86 billion initiative, known as the “Scaling Up Energy Efficiency in Europe and Central Asia Program” (E3 Program), aimed at significantly enhancing energy efficiency in the region. Over its ambitious 10-year duration, the program seeks to save more than 63 terawatt hours (TWh) of energy—equivalent to Switzerland’s annual electricity production—and reduce CO2 emissions by 18.7 million metric tons. The program's initial projects will concentrate on improving energy efficiency in public facilities, residential buildings, industrial sectors, and district heating systems across the participating countries.
  • April 2024: The European Commission has established a public-private partnership to enhance investments in energy efficiency projects, aiming to support the EU's emission reduction objectives. Furthermore, the directive requires EU member states to convert their district heating and cooling systems to fully utilize renewable energy, waste heat, or a combination of both by 2050.

Europe District Heating Market Report - Table of Contents

1. INTRODUCTION

  • 1.1 Study Assumptions and Market Defnition
  • 1.2 Scope of the Study

2. RESEARCH METHODOLOGY

3. EXECUTIVE SUMMARY

4. MARKET DYNAMICS

  • 4.1 Market Overview
  • 4.2 Industry Attractiveness - Porter's Five Forces Analysis
    • 4.2.1 Bargaining Power of Suppliers
    • 4.2.2 Bargaining Power of Buyers
    • 4.2.3 Threat of New Entrants
    • 4.2.4 Threat of Substitute Products
    • 4.2.5 Intensity of Competitive Rivalry
  • 4.3 Industry Value Chain Analysis
  • 4.4 The Impact of Macroeconomic Trends on the Market
  • 4.5 Government Initiatives and Programs on District Heating/Cooling Transition
  • 4.6 Development of District Heating Technology

5. MARKET DYNAMICS

  • 5.1 Market Drivers
    • 5.1.1 Augmented Demand for Energy-efficient and Cost effective Heating Systems
    • 5.1.2 Rising Urbanization and Industrialization
  • 5.2 Market Challenges
    • 5.2.1 High Infrastructure Cost

6. MARKET SEGMENTATION

  • 6.1 By End User
    • 6.1.1 Residential
    • 6.1.2 Commercial and Industrial
  • 6.2 By Country
    • 6.2.1 Germany
    • 6.2.2 France
    • 6.2.3 Poland
    • 6.2.4 Czech Republic
    • 6.2.5 Austria

7. COMPETITIVE LANDSCAPE

  • 7.1 Company Profiles
    • 7.1.1 Vattenfall AB
    • 7.1.2 Danfoss AS
    • 7.1.3 Engie SA
    • 7.1.4 Statkraft AS
    • 7.1.5 Logstor AS
    • 7.1.6 Vital Energi Ltd
    • 7.1.7 Göteborg Energi
    • 7.1.8 Alfa Laval AB
    • 7.1.9 Ramboll Group AS
  • *List Not Exhaustive

8. INVESTMENT ANALYSIS

9. FUTURE OUTLOOK OF MARKET

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Europe District Heating Industry Segmentation

District heating provides heat to households and commercial buildings by supplying hot water through a distributive channel of insulated pipes. The resources used for heating are shifting from fossil fuels like coal and natural gas to renewable sources of energy like solar energy and geothermal energy.

The Europe district heating market is segmented by end-user (residential, commercial, and industrial) and country (Germany, France, Poland, Scandinavian Countries, Czech Republic, Austria, and the Rest of Europe). The market sizes and forecasts are provided in terms of USD value for all the above segments. The study also examines the impact of macroeconomic trends on the market and impacted segments. The study also discusses the drivers and restraints likely to influence the market's evolution in the near future. The market sizes and forecasts are provided in terms of value (USD) for all the above segments.

By End User Residential
Commercial and Industrial
By Country Germany
France
Poland
Czech Republic
Austria
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Europe District Heating Market Research Faqs

How big is the Europe District Heating Market?

The Europe District Heating Market size is expected to reach USD 62.11 billion in 2025 and grow at a CAGR of 5.90% to reach USD 82.73 billion by 2030.

What is the current Europe District Heating Market size?

In 2025, the Europe District Heating Market size is expected to reach USD 62.11 billion.

Who are the key players in Europe District Heating Market?

Vattenfall AB, Danfoss A/S, Energie SA, Statkraft AS and LOGSTOR Denmark Holding ApS are the major companies operating in the Europe District Heating Market.

What years does this Europe District Heating Market cover, and what was the market size in 2024?

In 2024, the Europe District Heating Market size was estimated at USD 58.45 billion. The report covers the Europe District Heating Market historical market size for years: 2019, 2020, 2021, 2022, 2023 and 2024. The report also forecasts the Europe District Heating Market size for years: 2025, 2026, 2027, 2028, 2029 and 2030.

Europe District Heating Industry Report

Statistics for the 2025 Europe District Heating market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. Europe District Heating analysis includes a market forecast outlook for 2025 to 2030 and historical overview. Get a sample of this industry analysis as a free report PDF download.